CEO Elon Musk broke the news on Thursday at a company party following an intelligence conference in Long Beach, CA. "Jim is developing specialized AI hardware that we think will be the best in the world," Musk reportedly said, referring to Jim Keller, Tesla's vice president of hardware.

Musk offered no specific details about Tesla's chip development efforts, though Keller indicated that producing AI chips in-house could allow Tesla to make them much more powerful at a fraction of their current cost.

Musk also claimed that fully-autonomous vehicles will be on the road in the next two years.

The competition to develop self-driving technology has become fierce in recent years, involving both traditional car companies like Ford and GM, as well as tech companies like Alphabet and Apple and ride-hailing services like Uber and Lyft.